Tag Archives: Corporations

Yes, They Are Communists

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The delightfully salacious political news lately has been the ‘Occupy’ movements around the world. Shout Bits has visited the Denver, CO rallies and can confirm one part of the Old Time Media reports – yes, they smell brutally offensive with BO. But the OTM is willfully ignoring another obvious fact – these protesters are of the same cloth as the communists that sought to revolutionize the US in the late 1960′s and early 1970′s. Their message is violence and repression, not some sort of peace and love.

Anyone who did not live through the 1968 Chicago DNC should read Dupes by Paul Kengor. In it, he combines commonly understood cold war history with later released KGB files to expose organizations such as trade unions, academic luminaries, and student anti-war organizations as indeed infiltrated by communists who took direct orders and funding from Moscow. Just as Sen. McCarthy suspected, the State Department did have communist agents occupying high positions of authority. 1960′s radical groups like SDS and the Weather Underground were in fact run by violent communists.

One of the interesting twists of revolutions is that they usually feed on their own. The 1960′s radical movement peaked under the far left President that gave the nation Medicare and the War on Poverty. Giving revolutionaries what the logically should want only emboldens them to pursue their ultimate end – in this case the abolition of private property and the dictatorship of the proletariat (i.e. communism). While Pres. Obama is a socialist from the European mold, the ‘Occupy’ troops clearly want more.

Goofy Message


Scary Messages
(side note: Deep Green Resistance is a communist organization that “believes that civilization, and especially industrial civilization, is fundamentally unsustainable and must be actively dismantled in order to secure a livable future for all species on the planet”)

Listen to the words of the protesters and consider their tactics; the OTM likes to pretend that these people do not have specific messages or demands, but they do. Democrats like Rep. Pelosi and Pres. Obama are seeking to align themselves with these groups to gain from their activism, but the message on the street is very different from the one filtered by the OTM. The street crowds want an end to capitalism and the current government as we know it; they do not want reform, they want revolution. They want corporations abolished and wealth redistributed. Socialism seeks to contain capitalist spirits, while communism seeks to abolish capitalism altogether. The ‘Occupy’ movement is communist.

But didn’t communism end with Sen. McCarthy, or the Chicago DNC, or at least with the Berlin Wall? Without funding and direction from Moscow, how could communism survive? Communism did not die, rather 1960′s communist radicals hid their stripes and turned to academia. Bernadine Dohrn, communist murderer, escaped the FBI’s top ten list and became a law professor at Northwestern University. Communist Noam Chomsky (self-described Anarchist, but truly a communist) was already an academic in the 1960′s, and after encircling the Pentagon completed his career at MIT. Communist terrorist Bill Ayers somehow escaped the death penalty and went on to be a professor at the University of Illinois (and a friend of Barak Obama). Communist terrorist Michael Klonsky also became a University of Illinois professor. Communist terrorist and ‘Che’ Guevara acolyte Mark Rudd fled the FBI in the 1970′s, but later taught math at Albuquerque Votech. The list goes on, but communists and their sympathizers escaped to academia where they have bread a new generation of useful idiots for their cause. The preponderance of college hippies at the marches shows that Marxism and communism are alive and well at the ivory towers.

Even though communism promised race equality, it produced horrific ethnic cleansing in places like China and Kazakhstan. Even though communists claim to be for free speech and assembly, only capitalist nations allow such rights. Even though communists call themselves democratic, the only tool of communist expansion is violence. Communists promise wealth equity, but they simply deliver poverty and starvation on a scale that has killed 100 million people or more. The promise of peace is met with the reality of genocide. The OTM should stop carrying water for the communists who are driving the ‘Occupy’ movement. Voters should recognize the protesters’ message and tactics as those of the 1960s’ radicals that sought the violent overthrow of the US, and ask why prominent politicians are aligning with these dangerous people. It only takes a little moral clarity to understand that the ‘Occupy’ protesters do not represent any traditional US value or aspiration.

Steve Jobs – A Life In Failure

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This week Apple co-founder Steve Jobs passed away after a lengthy battle with cancer. As a household name, people naturally mourned the man most had never met. Like his historical comparison, Thomas Edison, Jobs was a brash provocateur, did little of the hands-on inventing in his shop, enjoyed a non-conventional libation, and he oversaw monumental failures. Jobs’s sometimes nemesis, Bill Gates, has many of the same type-A traits, but Microsoft was essentially forbidden to fail, and that is the reason Apple is worth 25% more than Microsoft today.

Failure is the common thread among all great innovators. Edison’s monumental failure was his DC power grid. Westinghouse won the battle to electrify the nation with AC power – a vastly superior technology, yet Edison remains the greatest inventor of his time. Jobs’s failures were epic – the Lisa, Next Computer, the first portable Mac. Under different leadership, Apple also produced the Newton and other disasters. Unlike anything else, failure focuses the mind, redirects resources, and redoubles creative efforts. Most triumphs rise from the rubble of colossal failure. In Apple’s case, it teetered on the brink of insolvency at the end of 2000, only to become the most valuable publicly traded company today.

Microsoft also had its share of failures – Windows Me, Clippy, a host of failed applications. Microsoft’s early history was that of producing a poor first effort, but constantly improving until it dominated the market. The paths of Jobs and Gates diverged when the Government decided Microsoft was too successful. In 1998, a group of AGs and the DOJ responded by shackling Microsoft’s creativity; Microsoft essentially had to clear each new idea or product with government bureaucrats. Anything that might leverage Microsoft’s strengths in the market was forbidden. Microsoft had become akin to a public utility – profitable, but low growth and no innovation. Without the prospect of success, the risks of failure seem too great, and innovation at Microsoft tailed off.

To be sure, Microsoft employees continued to invent new technologies. Microsoft pioneered the tablet PC, touch screen smart phones, speech recognition built into Windows, and a wealth of patents. But Microsoft never bet the farm on any of these innovations, and they never dominated their markets. Most notably, Apple now dominates the tablet market that Microsoft launched a decade ago. Without the incentive and freedom to risk failure, Microsoft lost its way. Now that government oversight has been lifted, Microsoft is aggressively pursuing the markets it pioneered – smart phones and tablet PCs. The freedom to fail is the power to innovate and make the world better.

Shout Bits has argued against government interference in the creative process before, but the story of Steve Jobs is the promise of US exceptionalism, while the story of Microsoft is the decline of innovation when the government disallows failure. Jobs lead the true American life. He failed over and over; his life took as many turns as his short years allowed. He founded a Fortune 500 company, lost it, and eventually rebuilt it. Along the way, he revolutionized computers, movies, music, and telephony. Whenever Jobs took on an industry, those working for the established norm packed their bags.

On the other hand, while Microsoft started out disrupting industries with aggressive risk taking, later it was ensnared by government dictates on what was ‘fair.’ The careers of Jobs and Gates are a cautionary tale to anyone who might believe the government should allocate investments or somehow decide which ideas are to succeed. Even if Pres. Obama had picked a winner in Solyndra, the heavy hand of government would have foreclosed on someone else with an even better idea. Steve Jobs’s career was a celebration of the US’s unique capacity to tolerate the failures that eventually lead to the innovations that build the modern world.

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With All These Savings, We Will Soon Be Broke

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Unlike the private sector, government accounting is unaccountable. Governments are free to toss out ridiculous figures without an audit or criticism – Pres. Obama’s stimuli have saved 3 million jobs, please. One way governments claim to save money is through creative financing that would be illegal in the private sector. One recent example is the Denver bus system’s claim that it has saved $1.9 bln on a future train to the local airport. This savings is huge, considering the project’s budget is $2.3 bln. Nobody in the press questioned the improbability of such amazing savings or how the simple math could add up so favorably. In reality, RTD, Denver’s transit system, pulled a fast one by effectively taking out an illegal loan and raising taxes to pay for its airport train.

A little background on RTD’s train lust: RTD has always wanted to build a local train system for metro Denver, and voters rejected a series of tax measures to do so. In 2004, RTD finally succeeded in doubling the transit sales tax to fund an ambitious train system, including a link to the airport. Considering the fact that RTD had tried this several times in the past, one might assume that the budget was in place and that the tax increase would be sufficient. Oh naive ones, no. There was no budget or schedule, only empty promises. RTD eventually disclosed that they needed about twice as much money as they had initially told the voters. RTD wrestled with asking for a further 50% tax increase, but due to the recession and voter sentiment, they backed down. The solution, it turned out is a popular financing trick called the Public Private Partnership, or P3, which allows for off balance sheet financing of large construction projects.

While financiers like to parse deals to attract investors and sometimes hide risk, there is always a simple underlying truth. The reality of the airport train is that it will cost billions of dollars up front and passenger revenues cannot be collected until the work is done. Voters authorized a sales tax increase, along with eventual ticket sales, to pay for this project. No financial engineering can change the fact that this project needs about twice as much money as it has. The only solutions are to either delay construction or issue debt.

Enter the P3 concept. RTD partnered with a team of private contractors and train operators to reduce its upfront costs. This partnership will get the operating and tax revenues for most of the life of the train in exchange for building and operating it. Since the train is a money loser, RTD will pay the partnership $2.3 bln for taking on the liability. RTD will also allow the partnership to issue tax advantaged bonds to pay for the construction of the train. So, everyone is happy?

Everyone shouldn’t be happy because there are unanswered questions. Why didn’t RTD just issue its own bonds and save the middle man cost of a P3? Such muni bonds require the vote of the people, and public sentiment is generally against more government debt, so RTD went around the law and likely will of the people with the P3 concept. RTD has effectively entered into off balance sheet financing that, due to its lengthy term, violates the accounting rules a private company would have to follow. While the debt goes on the balance sheet of the private partners, the ultimate risk is still carried by the taxpayers, a financial sleight of hand that is often illegal under the Sarbanes Oxley law. Further, tax advantaged bonds like the one for the airport train siphon capital from the private sector because only the government can give investors a pass on income taxes. Further still, RTD has not stated who will set the train fares to and from the airport. Currently the bus to the airport is five times more expensive than a regular bus ride, and the P3′s train certainly won’t lower the fare.

Because RTD is the government, it makes its own rules. RTD engages in lease financing that would be illegal in the private sector. RTD skirts the law by issuing bonds without a vote of the people. RTD uses the power of the government to pay a lower coupon on its debt at the expense of regular bond issuers. Many of these sleights of hand that the Denver press lauded were tried ten years ago, by Enron. Former Enron CEO Jeff Skilling must be frustrated that had he done such things for the government, he would be a hero today instead of a federal prisoner.